Sunday, March 12, 2017

Oil prices have plunged to the lowest level this year as US shale producers boost output at an astonishing pace and crude inventories keep rising, triggering a wave of selling by hedge funds with record speculative positions. The US surge threatens to neutralise cuts agreed by the Opec cartel and a Russia-led group of producers last November, potentially delaying a full recovery of the market until 2018 or even later. Texas light crude fell to $48.90 a barrel on Thursday after yet another surprise jump in US stocks. Prices have slid 8pc in three days and have broken through key levels of technical support, dousing enthusiasm for commodities across the board. Higher interest rates are expected to push up the value of the dollar and suck in foreign funds to the US financial system. Surveys show firms are concerned that the high dollar will dent exports, and Trump has accused China and rival exporting nations of winning trade wars after artificially depressing their currencies.

Tuesday, January 17, 2017

The global economy faces a multitude of risks in 2017, ranging from rising protectionism spearheaded by Donald Trump to a severe slowdown in China, the International Monetary Fund has warned. The Washington-based fund used an update to its economic forecasts to highlight popular antipathy towards international trade and a widening in the gap between rich and poor. It called on governments to tackle inequality by helping people find work in fast-changing jobs markets shaken up by technology and globalization. The IMF made no changes to its October forecast for global economic growth to edge up this year after a sluggish 2016. But it upgraded its outlook for the UK economy, bringing the IMF more in line with other forecasters following signs that the British economy grew at a solid pace in the second half of 2016, despite the Brexit vote. The UK outlook for 2018 was cut, however.

Saturday, January 7, 2017

The US vice-president, Joe Biden, has said it is “absolutely mindless” for Donald Trump not to have confidence in the intelligence community, as the heads of the US agencies prepared to present their findings on Russian election interference to the president-elect. The unprecedented dispute between Trump and the intelligence services he will soon control broke into the open at a congressional hearing on Thursday as the head of US intelligence publicly defended his analysts, who he said “stand more resolutely” than ever behind their conclusion of “Russian interference in our electoral process”. Former Indiana lawmaker and member of the Senate intelligence committee has been banned from entering Russia: ‘I’m not a big fan of Putin’ Biden said it would be legitimate to question intelligence and ask for more detail or disagree but “dangerous” to publicly criticise the agencies and claim to know more than them. “For a president not to have confidence in, not to be prepared to listen to, the myriad intelligence agencies, from defence intelligence to the CIA, is absolutely mindless,” he said in an interview with PBS. “The idea that you may know more than the intelligence community knows – it’s like saying I know more about physics than my professor. I didn’t read the book, I just know I know more.”

Sunday, December 18, 2016

The US Federal Reserve has raised interest rates for only the second time in a decade.Janet Yellen, the chairman of the Fed, described the move as “a reflection of the confidence we have in the progress that the economy has made and our judgment that progress will continue”. But with “considerable uncertainty” surrounding the economic outlook, how is Donald Trump’s election as US president likely to shape the path of interest rates? After the financial crisis, the Fed slashed rates close to zero in a bid to support economic activity and prevent a bigger rise in unemployment.It kept them there until December 2015, when it raised its target range to between 0.25pc and 0.5pc.

Back then, policymakers signalled that four more interest rate rises were on the way if world events turned out as they predicted. They didn't. At the start of 2016, stock markets were rocked by fears over the Chinese economy, and policymakers opted to keep rates unchanged, noting that they were "closely monitoring global economic and financial developments". The Brexit vote in June also caused concern among policymakers. Even before the vote, policymakers noted that "the upcoming British referendum on membership in the European Union could generate financial market turbulence that could adversely affect domestic economic performance." While the Fed's mandate states that policymakers must "promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates" in the US, global events matter. The US presidential election also gave policymakers reasons for pause. At the start of last month, they judged that "the case for an increase in the federal funds rate [ie. interest rates] has continued to strengthen but [we] decided, for the time being, to wait for some further evidence of continued progress toward its objectives." While the UK voted for Brexit and the US voted for Donald Trump, the market reaction has been relatively calm.Investors are now expecting a mini-economic boom in the US and have pulled cash out of bonds and emerging markets and into US equities. Following last night's announcement, yields on two year Treasury bonds climbed to a seven-year high on expectations of faster rate hikes.Implied borrowing costs across Europe also ticked higher, with UK benchmark 10-year gilt yields

Thursday, June 9, 2016

The primary elections in the US are nearing the end, and results so far show that Donald Trump will be the Republicans' candidate, while the Democratic Party seems ready to go all the way to make sure that Hillary Clinton stays in the race for the White House. But what seemed like a matter of time underwent a major change of the script, as Trump is leading Hillary in the polls. In this case we are talking about the phone calls of the former US state secretary, who violated official regulations and used her own e-mail server during the time that she held one of the most important positions in the Obama administration. After a period of relative calm, when it seemed that Hillary's violation of the law would be eventually overlooked, the situation changed radically over the last few days, after the publication of a report by Office of the General Inspector of the Department of State. It states that the former US State Secretary "used e-mail in an inadequate manner, without complying with the methods for the logging of public documents and without complying with the policy of the ministry", according to an article in the Washington Post. The report explicitly contradicts the numerous statements by the former State Secretary, which states that "the use of a private server was allowed and no official approval was necessary", and Hillary Clinton accused the institution that she used to lead of "anti-Clinton bias".

Sunday, May 29, 2016

The head of the US Federal Reserve has said an interest rate rise is likely to be “appropriate in the coming months”, if the economy continues to improve. Speaking at an event at Harvard University, Janet Yellen said the central bank will monitor incoming data and risks, reiterating that the Fed will tread with caution in raising rates. “It’s appropriate - and I’ve said this in the past - for the Fed to gradually and cautiously increase our overnight interest rate over time.” In Yellen’s biggest hint yet that the central bank could act this summer, she added: “Probably in the coming months such a move would be appropriate.” “If we were to raise interest rates too quickly and we trigger a downturn we have limited scope to respond. We should be cautious about raising rates too steeply.”...The rate hike is contingent on the ongoing improvement in the world’s largest economy, specifically the labor market. Unemployment currently stands at 5pc. “The economy is continuing to improve…. Growth looks to be picking up,” said she added. Joshua Mahony, of IG, said: “Much has been made of today’s speech from Janet Yellen, which caps off a week where seemingly every member has had their say on the possibility of a June rate hike.”

Wednesday, December 16, 2015

The US Fed has delivered a nice blow "Christmas present" to Main Street businesses. The US Fed has NEVER cared about Main Street, it ONLY cares about Wall Street. The collapse of the US economy will accelerate, while the Fed pushes out fake statistics pretending things are OK...Yellen says policymakers have raised rates now "to keep the economy moving along the growth path its on ... we would like to avoid a situation where we have left so much accommodation in place for so long that we overshoot those objectives", meaning they are forced to "tighten abuptly" and risk undermining the recovery. She says that while policymakers are "reasonably close" to achieving one part of their mandate: full employment, she recognises they are "significantly short" of achieving the second part: keeping inflation at 2pc. Policymakers will monitor the data closely in the coming months, though there is no formula on how policymakers would proceed with future rate hikes. Inflation stood at 0.2pc in October, well below the Fed's 2pc target. Yellen repeats that much of the recent downward pressure on inflation has come from "transitory factors" such as falling oil prices "that we expect to abate over time". She says "diminishing labour slack" is expected to put "upward pressure" on inflation in the coming months. Yellen also reminds everyone that it takes time for monetary policy to filter through to the economy. If policymakers delayed rate hikes for "too long" they may have to tighten "relatively abruptly to keep the economy from overheating and inflation from overshooting". This could push the economy back into recession, she says. She says "even after today's increase the stance remains accomodative", with the FOMC expecting "gradual increases in the Federal Funds Rate.

Saturday, September 19, 2015

The Federal Reserve declined to raise interest rates from their record low of near-zero on Thursday, citing concerns that the still fragile world economy may “restrain economic activity” and further drag down already low inflation. While some economists had expected a rate rise – the first since 2006 – recent stock market turmoil in China and fears that a slowdown in the world’s second largest economy could dampen the global economy appear to have put off the decision for now. Janet Yellen, the Fed chair, said the central bank had maintained the federal funds rate at 0-0.25% – where it has been since the 2008 financial crisis – because of “heightened concerns” about a sharp slowdown in China and lower-than-desired inflation. She said the US recovery from “the great recession” meant that there was an argument to be made for increasing rates – and the bank’s poliycmakers had that argument today – but in the end they still needed more evidence that there was a sustained global recovery. The Federal Reserve was not expected to pull the trigger on an interest rate rise until next year in the wake of a global stock market sell-off triggered by economic turmoil in China. The US central bank held fire on its first rates rise in more than nine years as it admitted on Thursday night that “uncertainties abroad” had made it more risky to tighten policy. A slump in equities over the past month, sparked by fears over the strength of China’s economy, “may restrain economic activity”, it warned. The Fed’s policymakers said that this could put “downward pressure on inflation in the near term”. “We’ve long expected some slowing in Chinese growth over time, as they rebalance their economy,” Fed chair Janet Yellen said. “The question is whether there might be the risk of a more abrupt slowdown than we expect.” Yippeee! Free money forever. It always works, printing, borrowing, spending. Every time. Everywhere. No fear. Borrow away. Low or no interest. I'll have to check, but I believe I posted on the day that QE1 was launched that once you start down the road of 'Stimulating' the economy with ZIRP and QE it is impossible to stop. However - and this is the kicker - just like the Weimar experience, by the time the 'Serious people' come to accept that their clever, clever schemes are not working, it is too late.

Rudy von Havenstein wasn't stupid, he didn't look at the hyperinflation of the mark and do nothing because he was dumb. He did it because for a long time his policies produced no significant inflation and indeed appeared to be working. By the time his folly became clear he could not stop without triggering an immediate collapse. Seems familiar, somehow.

Monday, July 20, 2015

Senator Rand Paul on Tuesday officially sued the Obama administration, seeking to stop it from enforcing a federal banking law that has led large numbers of Americans overseas to renounce their citizenship. In a move with implications for his 2016 presidential bid, Mr. Paul joined six other plaintiffs in a suit filed by Republicans Overseas Action (ROA), arguing that the Foreign Account Tax Compliance Act (FATCA) is unconstitutional. The 2010 law, passed by a Democratic Congress, has been a centerpiece of President Obama’s campaign to crack down on wealthy Americans he says have been dodging taxes by hiding their money overseas. But it has become enormously controversial, empowering foreign banks to turn over overseas Americans’ private information to foreign governments, who then must turn it over to the Treasury Department.

The lawsuit argues the agreements the Treasury Department reached with foreign countries to gain access to Americans’ banking information violates the Constitution’s Article II, Section 2 that requires two-thirds of U.S. senators present and voting to approve a foreign treaty. “This lawsuit speaks volumes about the Obama administration’s lawlessness and disregard for the Constitution,” said Jim Bopp Jr., lead attorney for the plaintiffs who, collectively, have eight separate constitutional claims against the law and its enforcement mechanisms.

Mr.. Bopp noted he had only one Constitutional claim in the landmark Citizens United vs. FEC case, for which he was the original architect. A total of 1,335 Americans renounced their U.S. citizenship during the first three months of 2015, according to figures released by the IRS.

That suggests U.S. renunciations will hit another new high this year. Last year, 3,415 Americans gave up their citizenship — 15 times more than in 2008. “Americans overseas are suffering egregious unconstitutional violations of their privacy and are facing draconian fines by the vigorous enforcement of the law by the Obama administration,” said Mr. Bopp. “The vast majority of overseas Americans are law-abiding middle class Americans, but the Obama administration treats them all as tax cheats.” “We want the federal court to stop Obama’s Internal Revenue Service by immediately issuing a preliminary injunction that will protect Americans overseas until a trial can be held by the court.,” Mr. Bopp said. Critics emphasize the government overreach that they say the law’s efforts to nail tax cheaters represents.

Saturday, November 29, 2014

MEXICO CITY (AP) -- The U.S. Embassy in Mexico issued a security message Friday warning U.S. citizens to avoid the Pacific resort of Acapulco because of violence and protests.

In yet another blow to a coastal city once favored by U.S. movie stars and jet-setters in the 1950s and `60s, the embassy said its personnel "have been instructed to defer non-essential travel to Acapulco, by air or land," and added that it "cautions U.S. citizens to follow the same guidelines."

The alert noted that "protests and violent incidents continue in Guerrero state in response to the disappearance of 43 students there." Demonstrators have blocked highways to Acapulco, hijacked buses and blockaded the city's airport to demand the government find the students who disappeared Sept. 26 in the nearby city of Iguala. Prosecutors say local police working for a drug gang probably turned the students over to gang members, who may have killed them and burned their bodies.

In early November, demonstrators blocked Acapulco's airport for hours carrying clubs, machetes and gasoline bombs, causing hotel reservations on a subsequent three-day holiday weekend to fall about 35 percent, said Javier Saldivar, head of Acapulco's business chamber. Hotel occupancy that should have neared 95 percent was only about 60 percent. "We suffered a serious loss," Saldivar said. While U.S. tourists account for about 55 percent of foreign visitors to Mexico, relatively few of them go to Acapulco any more. For example, while Mexico's most popular cruise ship port, Cozumel, handled 894 cruise ship arrivals in 2013, Acapulco had only 9. Drug gang violence has also played a role. In recent years there have even been some shootouts on Acapulco's famed coastal boulevard, but those incidents have calmed somewhat in the last two years. Acapulco was once a well-regarded destination. It was during a vacation there in the 1960s that novelist Gabriel Garcia Marquez came up with the idea for "100 Years of Solitude." It was there that Bill Clinton took a young woman named Hillary for a honeymoon in 1975. But in the 1970s and `80s, the resort's infrastructure crumbled, and poor, crowded settlements sprung up inland from the bay, sparking rising problems of unemployment, crime and pollution.

Tuesday, November 18, 2014

When it comes to U.S. foreign policy, Americans must sometimes feel like Goldilocks in the three bears’ house. The porridge that was President George W. Bush’s “freedom agenda”—promising democracy for everyone from Karachi to Casablanca—was too hot. The mush that has been President Barack Obama ’s foreign policy—heavy on rhetoric about resets, pivots and engagement but weak in execution and deeply ambivalent about the uses of U.S. power—is too cold.

What we need instead, as the fairy tale has it, is a foreign policy that is just right—neither too ambitious nor too quiescent, forceful when necessary but mindful that we must not exhaust ourselves in utopian quests to heal crippled societies. The U.S. finds itself today in a post-Cold War global order under immense strain, even in partial collapse. Four Arab states have unraveled since 2011. The European Union stumbles from recession to recession, with each downturn calling into question the future of the common currency and even the union itself. In Asia, China has proved to be, by turns, assertive, reckless and insecure. Russia seeks to dominate its neighbors through local proxies, dirty tricks and even outright conquest. North Korea’s nuclear arsenal and Iran’s effort to develop one tempt their neighbors to start nuclear programs of their own. And even as the core of al Qaeda fades in importance, its jihadist offshoots, including Islamic State, are metastasizing elsewhere.

As for the U.S., the sour experience of the wars in Iraq and Afghanistan has generated a deep—and bipartisan—reluctance to interfere in foreign conflicts, on the view that our interventions will exact a high price in blood and treasure for uncertain strategic gains. One result is that aggressive regimes seem to think that they can pursue their territorial or strategic ambitions without much fear of a decisive U.S. response. Another is that many of our traditional allies, from Israel to Saudi Arabia to Japan, are quietly beginning to explore other options as the old guarantees of the postwar Pax Americana no longer seem as secure as they once were. How should an American president navigate through this world of ambitious rogues and nervous freelancers? How can the U.S. enforce some basic global norms, deter enemies and reassure friends without losing sight of our global priorities and national interests? How do we conduct a foreign policy that keeps our nightmares at bay, even if we can’t always make our dreams come true? When it comes to restoring order in places widely assumed to be beyond the reach of redemption, there is a proven model for us to consult. But it has nothing to do with foreign policy; it has to do with policing our toughest inner cities. And it has brought spectacular—and almost wholly unexpected—results.

Tuesday, July 29, 2014

On 16 July 2014, the Supreme Court provided clarity on the nature
of a principal’s entitlement to recovery of a secret commission or bribe
received by an agent. The court ruled that when an agent acquires a benefit as
a result of his fiduciary position, including a secret commission or bribe, he
is to be treated as having acquired the benefit on behalf of his principal and
so holds it on trust for the principal. The ruling is significant in the
context of insolvency, as the effect of the decision is to give a principal a
preferential claim over the assets of his agent, as against an unsecured
creditor. It also permits the principal to trace the bribe into the hands of
others (where they are not bona fide purchasers), which can be crucial
where the agent has dissipated his assets. This ruling confirms a principle
which has, to date, been treated inconsistently by the courts since the
nineteenth century.

Facts of the case: In
December 2004, FHR European Ventures LLP (FHR) purchased the issued share
capital of the Monte Carlo Grand Hotel SAM from Monte Carlo Grand Hotel Ltd (the
Seller). Cedar Capital Partners LLC (Cedar) were consultants who acted as FHR’s
agent in negotiating the purchase of the hotel. However, Cedar had also entered
into an “Exclusive Brokerage Agreement” (Agreement) with the Seller, under which
Cedar received a €10m fee on conclusion of the sale and purchase of the hotel in
or around January 2005.

In November 2009, the claimants brought proceedings to recover the
€10m fee from Cedar on the basis that they had failed to disclose the Agreement
to the claimants and breached their fiduciary duties. The claim was successful
at first instance, but the judge refused to give the claimants a proprietary
remedy in respect of the monies (which would otherwise have put the claimants in
a favorable position over unsecured creditors in the event of insolvency).
Instead, FHR was held to have a personal claim against the agent.

The Court of Appeal granted the claimants’ appeal on this point
and made a declaration that Cedar received the €10m fee on constructive trust
for the claimants and so was entitled to a proprietary remedy. This decision
has now been upheld by the Supreme Court.

The argument focused on the limits of the application of a rule of
equity that an agent who acquires a benefit as a result of his fiduciary
position or pursuant to an opportunity resulting from his fiduciary position, is
to be treated as holding that benefit on behalf of, and so on trust for, the
principal. If the rule applied in the context of a bribe or secret commission,
it would give the principal a proprietary claim to the bribe as well as a
personal claim against the agent; if not, the principal would have only a
personal claim against the agent. Cedar argued that the claimants should not be
entitled to a proprietary remedy in such a case, on the basis that a bribe or
secret commission was always intended to be made to the agent, not his
principal; it was never the principal’s property. Accordingly, it would be
wrong to assume a constructive trust and there should be an exception to the
equitable rule to that extent. FHR argued that the equitable rule should apply,
on the basis that equity does not permit an agent to rely on their own wrong to
justify retaining a benefit received as a result. Lord Neuberger, who
delivered the judgment, reviewed the conflicting authorities and concluded that
it was not possible to decide the case on the basis of clear legal authority and
so it was necessary to consider the matter from the perspective of principle and
practicality. He considered Cedar’s argument to be the more complicated to
justify and also unattractive, given that in a situation where the agent
receives a bribe or secret commission from a third party, there would be a
strong possibility that that payment would disadvantage the principal. Looking
at the facts of the case, Lord Neuberger considered that had the Sellers not
paid the €10m to Cedar, it may have accepted a reduced price to reflect the fact
it did not have to pay the large fee to the consultant. Furthermore, given the
heightened awareness and concern about bribery, the Supreme Court said that it
expected “the law to be particularly stringent in relation to a claim
against an agent who has received a bribe or secret commission” (at
paragraph 42).

FHR’s arguments had the merit of simplicity and were consistent
with the fundamental principles of the law of agency. They were also consistent
with the position in other common law jurisdictions, namely Australia, New
Zealand, Singapore, Canada and the US. It also seemed curious that if Cedar’s
arguments were preferred, this could have the effect that a principal whose
agent wrongly accepted a bribe would be worse off (in terms of recovery) than
where the principal had obtained a benefit “in far less opprobrious
circumstances” (at paragraph 41).

Accordingly, the Supreme Court favored the claimant’s argument,
concluding that “there is no plainly right answer, and, accordingly, in the
absence of any other good reason, it would seem right to opt for the simple
answer” (at paragraph 35). This decision provides a welcome clarification
of the position of the status of bribes and secret commissions paid to agents.
It provides a departure from the jurisprudential differentiation between
different types of benefits that an agent may receive in breach of his duties
that had occupied the minds of lawyers and their textbooks for many years. The
judgment is likely to have a significant impact on cases where the agent in
question has dissipated his assets or has become insolvent, such that the
principal may not otherwise have been able to (1) recover the full amount of the
bribe or secret commission from the remaining assets when other creditors are
taken into account and/or (2) trace the funds into the hands of non-bona
fide purchasers. Of course, where a principal seeks to recover what is, in
effect, a bribe paid to the agent, this may create other issues for the
principal to grapple with, not least the money laundering provisions in the
proceeds of crime legislation. If not carefully considered and complied with,
the principal may find himself committing a criminal offence by recovering
“criminal property”.

Friday, July 4, 2014

Touting the deal earlier this year, the United States Chamber of Commerce said a successful TISA agreement would benefit America’s services industry and its 96 million, or 84 percent, of the nation’s private sector workers. “As its chief goals, the TISA should expand access to foreign markets for US service industries and ensure they receive national and most-favored nation treatment,” the chamber said of the deal in February. “It should also lift foreign governments’ sectoral limits on investment in services," “eliminate regulatory inconsistencies that at times loom as trade barriers” and “prohibit restrictions on legitimate cross‐border information flows and bar local infrastructure mandates relating to data storage.”

WikiLeaks warns that this largely important trade deal has been hardly discussed in public, however, notwithstanding evidence showing that the policy makers involved want to establish rules that would pertain to services used by billions worldwide.

“The draft Financial Services Annex sets rules which would assist the expansion of financial multi-nationals – mainly headquartered in New York, London, Paris and Frankfurt – into other nations by preventing regulatory barriers,” WikiLeaks said in a statement. “The leaked draft also shows that the US is particularly keen on boosting cross-border data flow, which would allow uninhibited exchange of personal and financial data.”

Additionally, the current draft also includes language inferring that, upon the finishing of negotiations, the document will be kept classified for five full years.

In Australia, journalists at The Age reported that experts say the proposed changes included within the WikiLeaks document “could undermine Australia's capacity to independently respond to and weather any future global financial crisis.”

Dr. Patricia Ranald, a research associate at the University of Sydney and convener of the Australian Fair Trade and Investment Network, told the paper that the documents suggest the US wants to “tie the hands” of other governments, including allied ones, by way of sheer deregulation.

“Amendments from the US are seeking to end publicly provided services like public pension funds, which are referred to as 'monopolies' and to limit public regulation of all financial services,” she said. ''They want to freeze financial regulation at existing levels, which would mean that governments could not respond to new developments like another global financial crisis.''

Earlier this week, US Trade Representative Michael Froman said the TISA deal was already well on its way to being put together.

"The basic framework of the agreement is in place, initial market access offers have been exchanged, and sector-specific work in areas like telecommunications andfinancialservices is in full swing,” Froman said, according to Reuters.

The document published this week by WikiLeaks is dated April 14 — two months before Froman last weighed in on the progress of the negotiations and six months after his office hailed previous re-write to the proposal. Along with representatives from Canada, Israel, Mexico, New Zealand, Turkey and dozens others, American policy makers will met in Geneva, Switzerland later this month starting June 23 to begin the next round of negotiations.

Sunday, June 29, 2014

The US economy has shrunken at its fastest rate since the depths of the recession five years ago as it emerged that the harsh winter took a far bigger toll on activity than previously estimated.

Official data released in Washington showed that output as measured by gross domestic product fell at an annual rate of 2.9% in the first three months of 2014. Originally, the Department of Commerce had said output rose by 0.1% at an annual rate in the quarter ending March before adjusting this to a 1% decline. The gap between the second and the third estimates was the largest on record. Wall Street was taken unawares by the size of the downward revision to growth in the world's biggest economy, with the consensus believing that growth would be down by 1.7% at an annual rate. But it expressed confidence that the US would quickly bounce back from a weather-affected start to 2014 by posting strong growth in the second quarter. Nancy Curtin, the chief investment officer of Close Brothers Asset Management said: "The US economy didn't just grind to a halt in the first quarter – it hit reverse as the polar vortex took its toll. But we can't judge current growth by looking in the rear-view mirror, and we are unlikely to see investors react strongly to what is now quite a long way behind us.

"More recent data have pointed to the economy picking up speed. Manufacturing is at a four year high, while the housing market is looking positive once more. It's clear that growth has gone up through the gears in Q2, and we'll see this reflected in the next GDP reading." Officials at the commerce department said the downward revision to growth had been the result of lower consumer spending on health care and a weaker than previously estimated contribution from exports.

Wednesday, June 18, 2014

As many as 500,000 Iraqis escaped Mosul as the city fell and the Iraqi army melted away.

But now, tens of thousands have decided to return.

In the Sunni dominated city, the removal of the Iraqi army by ISIS has been interpreted as a local victory; as a means of empowering Mosul residents against Iraqi Prime Minister Nouri al-Maliki and the Shia dominated national government who they feel has kept their people “oppressed”.

“For seven years we lived in a prison. The people who have come now [ISIS], are better than the Maliki army,” Maher, 36, told the Telegraph. He wouldn’t reveal his name for fear putting his family in danger. “All of Mosul feels this way.”

An English teacher, with a soft manner and kind eyes, Maher bore no similarity to the masked men in the ISIS adverts proffering holy slaughter.

But the sympathy he felt for his new occupiers sharply illustrates the threat that is now being posed to Baghdad, and the challenges that Mr Maliki will face to regain control of northern Iraq.

As jihadist insurgents have swept victoriously south, conquering village after village and pushing the front line to only 60 miles from the capital, they have met little resistance from Sunni residents.

On Friday William Hague, the foreign secretary, implied the British government may send special forces such as the SAS to advise Iraqi army units in how to fight the “terrorists”.

But the crises in northern Iraq is now less one of a single jihadist group to be rooted out and destroyed, than of a sectarian pushback by the Sunni population against the Iraqi government.

With the rest of his family crammed into his battered silver Sedan car, ready to drive to Mosul, Maher, the teacher, described the city, which he had been to the day before.

“The situation is quiet and normal now in Mosul. Schools and hospitals have opened,” he said. “There is no pressure from ISIS. Yesterday there was a parade by them in the streets to show off the weapons that they took from the Iraqi army. People came out to watch; they feel safe.”

Video footage from inside the city shows masked gunmen acting as traffic police, calmly waving cars through at a crossroads. Other images show the jihadists studiously repairing broken electricity lines.

One female resident, who asked not to be named, spoke to the Telegraph from her home inside the city.

“The armed men organise even the municipal services. Rubbish is being cleaned off the streets. Electricity is very fine: we now have it more than nine hours per day, which is even better than during Saddam [Hussein]’s rule,” she said.

“Now, in these days of being in the grip of the armed men, we only feel the wonderful peace, which we have missed for more than a decade now, since 2003.”

All the residents in Mosul who the Telegraph spoke with automatically referred to the Iraqi army as the “Maliki militia”.

After the 2003 invasion Maliki appointed mostly Shia commanders from southern Iraq to lead the troops in Mosul. Feeling no allegiance to the city, the soldiers’ behaviour toward the locals ranged from demeaning to violent, residents said.

Troops were known for running sweeping arrests of any Sunni men who happened, even by accident, to be in the vicinity of an incident. The city was fragmented by army checkpoints that were difficult for locals to cross. And then there were the smaller humiliations of troops swaggering with entitlement taking petrol and goods without paying.

Twenty-two year old Refat said he spent six months in prison after a suicide bomb exploded close to the sweet shop where he worked: “The soldiers rounded all the workers in the area up and put us in jail. They told us we are all terrorists,” he said. “Under Maliki it was a religious right to kill or mistreat Sunnis.”

“We will live under al-Qaeda if they give people their rights. We have no problem with living under Shariah law, even if woman have to cover their face,” he added.

But some residents of Mosul have already felt the brutal, crazed, streak in the jihadists who for now, are playing nice.

Ahmed, 24, is an Iraqi police men from Mosul who fled the city after witnessing ISIS beheading four soldiers at a checkpoint.

“I was hiding in my home. I could see the ISIS checkpoint outside. They took the ID cards of the men and checked their names against a database.”

“Then they pulled them out of the car. They put them in a line, and, grabbing their faces swiped their swords. They beheaded all four people.”

In the first few days after taking control, the jihadist went on a rampage of revenge. In storming the military headquarters they gained access to the database of military personnel, Ahmed said. Since then, they have been seeking out members of the special forces who had in the past put members of ISIS in jail, and exacted their vendetta.

In addition they have begun to impose their ideology on the people of Mosul.

At public gatherings, and using the tannoys of the minarets of mosques, the jihadists espoused the “ten commandments” of their rule.

“People, you tried secular rulings and they gave you pain. Now is time for the Islamic state,” they shouted at one night rally, the lights of the mobile phones of residents shining in the dark as they recorded the new rules.

The new dictates are typical of the ISIS movement, reflecting almost exactly the regulations it imposed in Raqqa, the northern Syrian city under it’s control: Smoking, drinking alcohol, tattoos, and grave sites are banned. Women should be covered in public, but preferably should remain at home.

Breaking these rules is punishable by public flogging. Thieving can result in limbs being chopped. Committing adultery merits being stoned to death.

It is unclear how long the honeymoon between the jihadists and the people of Mosul can last.

The occupation of the city may repeat patterns already established in Syria, where initially the population welcomed the jihadists as a force for moral good after years of suffering under a brutal and corrupt leadership. But then, the strict regulations imposed by ISIS debilitate the freedoms they used to have. They grate and inspire rejection.

“We know that radicalism won’t survive in our society and we will take care of that,” said the woman speaking from Mosul.

Thursday, April 3, 2014

The US has moved a step closer to becoming a global gas exporting power with the approval of a major liquefied natural gas (LNG) export terminal on the west coast that will send a warning signal to the Kremlin. The Department of Energy authorized a permit on Monday for the Jordan Cove LNG project in Oregon to export 800m cubic feet per day (cfpd) of gas for the next 20 years to countries that don't have a free-trade agreement with the US.

The approval comes amid concern that Russia will use its vast gas and oil resources as political leverage in its dispute with the West over the future of Ukraine and Crimea. The US recently released 5m barrels of oil for sale from its Strategic Petroleum Reserve in a move that was interpreted at the time by some analysts as a warning to Moscow not to use energy as a weapon.

If Putin gets even more annoyed, he will do a massive deal with China (he's going there in May) to flog Russia's oil using a commodity-backed reserve currency that bypasses the petrodollar.

That might well further crash both the US economy and ours.

Is this deliberate neocon policy?

“A nation can survive its fools, and even the ambitious. But it cannot survive treason from within. An enemy at the gates is less formidable, for he is known and carries his banner openly. But the traitor moves amongst those within the gate freely, his sly whispers rustling through all the alleys, heard in the very halls of government itself. For the traitor appears not a traitor; he speaks in accents familiar to his victims, and he wears their face and their arguments, he appeals to the baseness that lies deep in the hearts of all men. He rots the soul of a nation, he works secretly and unknown in the night to undermine the pillars of the city, he infects the body politic so that it can no longer resist. A murderer is less to fear.”

US lawmakers are pushing the Department of Energy to speed up approvals of gas export projects to add to international pressure already building on Vladimir Putin after the White House and the European Union hit Russia with sanctions.

“Given the situation in Ukraine, this licence sends a positive signal to our allies and to energy markets that the United States is ready to join the growing global gas trade,” said Senator Lisa Murkowski, who sits on the influential US Senate Committee on Energy and Natural Resources in a statement following the gas export approval. LNG, shipped by boat, could be cheaper than Russian gas transported by pipeline over thousands of miles. Always useful to have an alternative source of supply to keep the prices on a level. Russia has played the shut off game before and is relying on it now ( it may well succeed in the short term - I would place bets on Russia retaining the Crimea ) Remember OPEC in the 70s ? That promoted alternative supplies of oil....I think people are missing the main point here... Russia can't be dealt with in the same way Irak and Lybia were... and if they start selling oil and gas in ANY currency the dollar will have no support.. the days of the petro-dollar are now numbered and the logic of tripling the money supply will soon arrive, i.e. the dollar will drop like a Ukrainian soldier gun... watch inflation shooting up in the US and GDP dropping also, which will bring about a reduction in the budget and overall power of the US to the level of a major power but no longer super-power... those days are gone, so let's all thank the EUSSR for bringing something good to the table for the first time in my rusty memory...

Friday, January 10, 2014

The US President, has nominated former Bank of Israel Governor Stanley Fischer
as vice chairman of the Federal Reserve. He will take over from Janet Yellen,
who becomes the first female chairman of the central bank when Ben Bernanke's
term finishes at the end of the month. The appointment comes as the central
bank starts to withdraw its historic stimulus. Mr Fischer is regarded as one of
the world's most prominent monetary economists and has taught many top
economist, including Mr Bernanke and European Central Bank President Mario
Draghi. "Stanley Fischer brings decades of leadership and expertise from
various roles, including serving at the International Monetary Fund and the Bank
of Israel," Mr Obama said in a statement. "He is widely acknowledged as one of
the world’s leading and most experienced economic policy minds and I’m grateful
he has agreed to take on this new role and I am confident that he and Janet
Yellen will make a great team." As second-in-command at the International
Monetary Fund from 1994-2001, Mr Fischer played a key role in battling the Asian
financial crisis. Before that he was chief economist at the World Bank. Mr
Fisher, who has both US and Israeli citizenship, was more recently was credited
with helping Israel safely navigate the 2007-2009 financial crisis. He stepped
down as governor of the Bank of Israel in June, three years into his second
five-year term. Mark Carney, Bank of England Governor, said in a statement: "I
am delighted by the prospect of Stan Fischer re-joining the global community of
central bankers. I had the enormous privilege of working closely with him when
Governor of the Bank of Canada and as chairman of the Financial Stability Board.
I have found Stan to be an immense source of insight and wisdom on issues
ranging from crisis management to the conduct of monetary policy and the reform
of the global financial system." Mr Obama also nominated Lael Brainard, who
recently served as the Treasury Department's top official for international
affairs, to serve on the Fed board and Fed Governor Jerome Powell to a new term
on the board ending in 2028.

Wednesday, January 1, 2014

For much of Washington, 2014 could not come soon enough. November's mid-term elections represented Barack Obama's last hope of redrawing the US political map and moving on from a year marred by divided government and Congressional stalemate.

Whether Democrats succeed in their unlikely dream of seizing back control of the House of Representatives or Republicans instead continue to make inroads on their fragile lead in the Senate is another matter, and much depends on whether the White House can first restore public faith in its flagship healthcare reforms by the 31 March enrolment deadline.

Spring will also see Republican leaders under renewed pressure from their Tea Party wing, which is preparing primary challenges against moderates in the Senate that will further constrain any ability to cut deals with Democrats once election fever starts.

Several potential bright spots could lift everyone's spirits, however. A recovering economy may take pressure off America's anaemic job market and shocking social stagnation. US troops should return from Afghanistan – with or without a deal in Kabul to retain a security presence. And progress toward Iranian nuclear detente may give the White House cause to celebrate a rare foreign policy success, even if Congress will still need persuading.

Other challenges looming in 2014 have been postponed by the dysfunction and inertia of 2013. Barack Obama still needs to decide whether to authorise the Keystone energy pipeline, which pits environmentalists against North America's unconventional oil boom; expect tough new climate change controls for power companies instead if he does. And with all three branches of government now proposing reform of the NSA, Obama will finally have to decide before January's state of the union address what to do about America's surveillance state.

For much of 2014, the US Capitol dome will be shrouded in scaffolding for renovations – both real and metaphorical. What emerges next December will say much about the future of American democracy.

Tuesday, December 24, 2013

China’s central bank has rushed to pump money into the stalling banking system but markets across Asia still fell sharply amid fears that the world’s second-largest economy faces a credit crisis.

Cash rates on China’s money markets jumped after the move by the People’s Bank of China (PBOC) to ease a liquidity squeeze on banks. Both the Shanghai Composite Index and Hong Kong’s Hang Seng Index also fell amid concerns over structural problems in China’s financial system.

The Chinese seven-day bond repurchase rate, which essentially measures liquidity in the financial system, climbed to 7.6pc its highest since fears over a banking crisis in China first emerged over the summer.

State media in China had reported that the PBOC has unexpectedly pumped $33bn (£20bn) into the domestic money market through what it refers to as “short-term liquidity operation”.

“The focus is again on China where there is plenty of discussion on the squeeze in interbank funding markets,” said Deutsche Bank in a note to investors Friday. “The repo rate is now higher than yesterday amid market talk of a missed payment at a local Chinese bank. This is something to monitor over the next few days.”

Fears over a looming Chinese debt crisis spurred by a poorly regulated and opaque financial system stoked fears over the summer that the Asian powerhouse could finally be on the brink of a sharp slowdown in growth.

Much concern also surrounds what has become known as the “shadow banking” system that allows the Chinese to borrow money beyond their means.